This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the top of any article.

Banks See FX Profits Erode (WSJ)

Electronic trading cuts into banks’ revenue from foreign exchange.

Banks reported big drops in the revenue they earned from currency trading last quarter, the Wall Street Journal reports, reflecting both a decline in volume amid a relatively calm foreign exchange market and the growth of electronic trading. As more market participants switch to using electronic trading, banks lose the easy profits they made from matching up buyers and sellers. And e-trading is making the foreign exchange market more transparent and forcing banks to trim their bid-ask spread on FX trades.

The Journal argues that the FX market’s transition to e-trading will take more time than the stock market’s shift starting in the late 1990s, though, because the FX market is more decentralized and less regulated.

Treasury & Risk

Treasury & Risk is an online publication and robust website designed to meet the information needs of finance, treasury, and risk management professionals. Our editorial content, delivered through multiple interactive channels, mixes strategic insights from thought leaders with in-depth analysis of best practices, original research projects, and case studies with corporate innovators.